TMI Blog1998 (8) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... rs that incriminating documents relating to import of dry cell batteries by the concern M/s. Rahul Watches Pvt. Ltd., New Delhi might be concealed in the premises of the concern, search was conducted in the premises between 5.30 P.M. on 1-7-1996 and 1.30 A.M on 2-7-1996 by the officers of Special Intelligence and Investigation Branch (SIIB) of Delhi Customs Commissionerate on the strength of search warrant issued by SIIB. Search was conducted in the presence of the mother and the daughter but in the absence of H.B. Wadhawa. There were 4 old cardboard cartons in the premises, three of which contained 1,627 wrist watches of Tressa Swiss make with chains and one contained 3,000 pieces of watch movements in six packets. The goods were of foreign origin. The two ladies were unable to answer any questions or explain the presence of the goods of foreign origin and stated that H.B. Wadhawa was looking after the affairs of the concern. In the reasonable belief that these goods had been smuggled into India, they were seized. Also seized were loose documents Nos. 1 to 52. 3. It appears, later in the day on 2-7-1996, Veena Wadhawa informed the officers in a telephonic talk with her, her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to earlier, 1,500 pieces of watches had been purchased from M/s. Rama Watch Industries, Rajkot and 127 pieces had been assembled by the concern in the premises and all records had been shown to the seizing officers. Appellants denied justification for confiscation and imposition of penalty. The Commissioner overruled these contentions and passed the impugned order. 7. At the outset, learned Counsel for the appellant submitted that seizure of the watches and watch movements was illegal inasmuch as the seizing officers at the time of seizure could not have entertained reasonable belief that the goods were smuggled. Learned Counsel placed reliance on the decision of the High Court of Delhi in Shanti Lal Mehta - 1983 (14), E.L.T. 1715 (Del. H.C.). Shri K. Srivastava, SDR rebutted this contention and placed reliance on the decision in Indru Ramachand Bharvani - 1992 (59) E.L.T. 201 (S.C.) 8. In the first case Gold ornaments and diamonds were seized from the premises of the petitioner in that case under the `reasonable belief that they were smuggled goods. Existence of reasonable belief was challenged by the petitioner. That was because under Section 123, if where goods to which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any entry in the cash book. Petitioner also refused to disclose the names of the brokers. In these circumstances Supreme Court held that there was nexus between the materials and the formation of the belief that the goods were liable for confiscation. Referring to the other materials produced by the petitioner, the Court observed that these materials came into the picture only much later. It was held that there was adequate material to form reasonable belief that goods were smuggled goods and therefore, Section 123 of the Act was applicable. 10. Let us examine the circumstances present in the present case before the seizing officers immediately before the seizure. Information they had did not relate to watches or watch movements but related to dry cell batteries. Apparently dry cell batteries were not found. The officers found 1,627 Tressa Swiss watches and 3,000 watch movements of the same brand. They found a large number of documents and realised that there were no documents showing payment of customs duty on these goods. They questioned Veena Wadhawa but she pleaded ignorance and stated that her husband has been managing the affairs of the concern. Her husband was not availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could lead to the"reasonable belief" that the goods were of smuggled nature. Hence invocation of Section 123 of the Act casting the burden of proof on the appellant was proper. 12. We now turn to the finding of the adjudicating authority that 1,627 watches were smuggled watches. Learned Counsel submitted that there are adequate materials to show that 1,500 out of 1,627 watches had been manufactured by M/s. Rama Watch Industries, Rajkot and purchased by M/s. Rahul Watches Pvt. Ltd. We have already adverted to the copy of the invoice and absence of any materials to show transportation from Rajkot to New Delhi and also of any trading records maintained by the concern. These circumstances have to be taken into consideration along with the nature of contentions raised by the concern and the persons connected with the concern at various stages. Two directors, at the time of search, offered no explanation. It may be, as suggested, they were ignorant. Sometime after the termination of the search on 2-7-1996, Veena Wadhawa informed the officers that her husband told her over telephone that watches had been assembled by M/s. Rahul Watches Pvt. Ltd. in their premises and excise duty had alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances clearly lead to the conclusion that 3,000 watch movements found in the premises must have been part of the validly imported consignment. It must necessarily follow that confiscation of watch movements and imposition of any penalty on that account would not be justified. 14. Appellants are also aggrieved by the value of Tressa Quartz determined by the adjudicating authority. The value was determined as Rs. 1,500/- per unit based solely on market enquiry in Delhi. Ruling market price in Delhi, even assuming it to be Rs. 1,500/- per unit cannot straightaway be regarded as c.i.f. value of the watches. Appellant seriously challenged the result of market enquiry. At page 56 is a copy of `Evening Times (a sister publication of Times of India Group) containing an advertisement by Rahul Watches Pvt. Ltd. to the effect that Tressa Swiss Quartz Watches with chain in 50 models were available at the price of Rs. 500/- onwards. Advertisement solicited distributors enquiry. These documents were produced before the Commissioner along with the reply to the show cause notice but he did not deal with the same. In these circumstances, value determined by the Commissioner cannot be accep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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